On Tuesday, Asian shares soared but investors caution before a Federal Reserve policy decision, crude oil prices retreated as economic growth concerns overshadowed supply concerns stemming from current Middle East pressures.
MSCI’s broadest index of Asia-Pacific outside Japan inched up 0.6 percent while Japan’s Nikkei fell 0.7 percent. Australian stocks gained 0.1 percent.
In Hong Kong, Hang Seng Index increased more than 1 percent. The Shanghai Composite Index dipped 0.1 percent and South Korea’s KOSPI soared 0.4 percent.
The Fed faces new demand by President Donald Trump to cut rates, starts a two-day meeting on June 18-19. Federal Reserve is anticipated to leave borrowing prices unchanged but maybe lay the groundwork for a cut this year.
Hopes for U.S. monetary policy have been boost riskier assets, which a month ago were buffeted in rising trade spat between Washington and Beijing. The S&P added 5 percent this month after dipping last month.
“The FOMC (Federal Open Market Committee) meeting is the week’s biggest event so there will be a degree of caution prevailing in the markets,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
César Pérez Ruiz, chief investment officer at Pictet Wealth Management, said in a note on Tuesday “if market expectations for cuts are not met, we could see a jump in market volatility.”
The dollar index versus the basket of six major currencies reduced 0.1 percent to 97.42 after withdrawing from a two-week high.
The Australian dollar eased to its five-month low of $0.6830 after Reserve Bank of Australia’s June meeting showed legislators thought it might may have to fall again to push down unemployment and revive wages and inflation.
British pound slumped $1.2512 its lowest since January. Concerns that former foreign minister Boris Johnson will replaced PM Theresa May as prime minister have dogged sterling.
The euro was little changed at $1.1230 after spending the preceding day confined to a narrow range.
U.S. crude oil futures dropped 0.3 percent to $51.77 a barrel after declining 1.1 percent in the preceding day. Brent crude futures, the international benchmark fell with similar amount at $60.76, subsequent Monday’s loss of 1.7 percent.
In commodity trading, oil prices tumbled on Monday as frail Chinese economic data a week ago led to worries of lower economic demand for the commodity.
The following incident oil tankers in the Gulf of Oman a week ago remained high, worries over flagging demand overshadowed pressures in the Middle East.